465 Mr R. G. Casey, Minister to the United States, to Mr R. G. Menzies, Prime Minister

Cablegram 143 WASHINGTON, 28 June 1940, 10.41 p.m.

FOR THE PRIME MINISTER MOST SECRET

I saw the Secretary of State [1] with the British Ambassador [2] this afternoon to receive reply to yesterday's representation.

The United States will not use force nor will they join the British Empire in negotiations with Japan and/or China.

The United States fleet will remain in the Pacific for the present although indication given that any sign of hostile naval forces abroad in the Atlantic might change this.

The United States will not take responsibility of asking China to give up anything but if the British Empire evolves formula which they think worth proposing to China and Japan then the Secretary of State does not exclude the possibility that they would give consideration to it.

The Secretary of State stated he believed it better to acquiesce in Japanese demands under pressure of force majeure than to accept them as part of agreed settlement.

The Secretary of State does not hide the fact that he does not believe we will get agreement with Japan at this late date.

It was made clear to the Secretary of State that it was not proposed that all elements in any proposed compromise should be at the expense of China but that all partners including the Netherlands who would benefit by such a settlement should add their quotas.

In spite of the above Secretary of State said he thought 14 points in my telegram 141 [3] stated the situation admirably.

I believe that the only alternative now is to frame proposals for the settlement of the Far Eastern situation as a whole which might be acceptable both to China and Japan. The British Ambassador at Washington, is so advising the British Government.

I presume you will advise the British Government regarding any proposals you may have from the Australian point of view.

The immediate task ahead of Britain is to meet as satisfactorily and quickly as possible the three current Japanese demands regarding Shanghai, the Hong Kong frontier and the Burma road.

In spite of the negative attitude of the United States I think it is essential to keep them advised of everything that is done or proposed. Grateful you keep me informed.

The State Department is not ready to reply yet regarding New Caledonia. It occurs to me that the United States would be quite justified in taking the same action in respect of New Caledonia and the Society Islands and Tahiti as Japan takes towards Indo- China as both Japan and the United States are equally neutrals as regards European belligerent nations. [4]

CASEY

1 Cordell Hull.

2 Lord Lothian.

3 Document 463.

4 This cablegram was repeated as no. 49 to S. M. Bruce, High Commissioner in London.

[AA: A981, FAR EAST 31, ii]